The Wild West ... the outback ... The new world of the 1800s was a time of true liberty. People stood on their own merits. They won or they lost and they reaped the rewards or swallowed the consequences. There were no cubicle dwelling civil servants hell bent on saving you from yourself. No planning permits no licenses no permissions no heritage overlay no bylaw no regulators no inspectors. And guess what ... it worked

This site is set up to provide a forum for a number of like minded professional economists to post and comment on contemporary issues. There are a number of regular contributors whose bios are made available on the site. Most if not all of these contributors use a pseudonym for the simple reason that they are practicing economists who must take into consideration the commercial implications of posting their opinions.

While some may feel that this is a bit of a gutless approach it is the only way we can ensure free and open discussion without jeopardising our paycheques.

Thursday, January 28, 2010

Does green = red? (Roy Rodgers)

Have those sneaky red little bastards crawled back under the bed?

When Fukuyama predecticted that we had just witnessed the end of history in 1992 what he was refering to was the death of socialism and the triumph of the classical liberal system. He was brave enough (or silly enough) to theorise that the battle of the great 'isms was over.

Fukuyama thought that the overthrow of communism meant that classical liberal democracy combined with technologically driven capitalism were end points for the collective evolution of society and of the politic. In other words they were in themselves final forms of government and economic organisation.... thus end points in history.

I'm going to go out on a bit of a limb here and suggest that while it's bleedingly obvious to everybody that socialism lost the battle last century, all those skivvy wearing , beret donned old red raggers (I swear to god they wear berets, I've only been to one Fabian presentation down at trades hall, but the beret count was at least 70%) and the dreadlocked, no shoe, no soap brigade of new stinky red raggers didn't just pack up their misguided 'ism and become accountants. NO NO NO ... they went out and found themselves a whole new cause... a whole new 'ism.

What Fukuyama didn't forsee was the rise of the next great 'ism ... environmentalism.

On the face of it, environmentalism would appear to be apolitical. Anyone can want to save the planet, you don't have to be a closet Marxist, a leafy suburbs labourite, you don't have to be a democrat, you can be a free marketeer, you can be a clasical liberal, you could even be an anarco- capitalist. After all, Abbot is a commited environmentalist ... he's going around talking about raising a green army no less (obviously an approach that would leave all his truly liberal supporters scratching their heads thinking '..what the hell is going on?').

The thing is ... any analysis of the proposals, policies and positions of the green movement and the broader environmental agenda leads to the obvious observation that it has no appreciation of the power of markets, no grasp of the ineffectiveness of centeralised planning and an apparent abject hatred of property rights. Environmentalism is fixated with the idea of market failure, greenies see externalities everywhere. And their answer is fairly straight forward ... socialise environmental assets (whatever the hell 'environmental assets' are) and directly control people's behaviour through regulation.

All the trappings of the socialist system appear to be dutifuly reproduced in the environmental movement. Don't get me wrong, I'm not saying there are reds under the bed and that we need to invade Vietnam. What I am saying is that there appears to be an incredibly strong relationship between the policies of groups such as WWF, GreenPeace, guys like Al Gore and Oxfam (although these guys appear to have the conflicting objectives of being green and promoting economic growth? work that out ... nut jobs) and the policy approaches previously adopted by just about any failed socialist state you wish to name.

And at the heart of this approach is an apparent faith in the power of centeralised control.

Just as an aside ... it's quite ironic that the environment fared much worse under socialism and communism than it did under the capitalist liberal democracies. How's that for an inconvenient truth.

Why we need to drag the reds out from under the bed.

While being more or less the child of socialism, environmentalism is much more ambitious than its predecessor. It lays claim to not just saving humaniy but saving the very planet we live on.

The grandioseness of its ambition is matched only by the inevitability of its failure. And the reason its doomed to fail is quite simply that it has chosen to ignore the lessons from the demise of socialism and has centred itself yet again on the idea that burecrates in cubicles can, through the powers of coercion vested in them, produce effective outcomes. This is an absolute crock of an idea, always has been an absolute crock of an idea and always will be an absolute crock.

So who cares? ... the reason it matters is that, while history has shown us that liberal societies are very robust and can over time reject such destructive ideology ... the process shouldn't be considered inevitable and if it does occur, it takes time. It took a good 30 years for Australia to shake off its social democratic chains and become a liberal democracy. It took the prime ministerships of Hawke, Keating and Howard to get Australia to the point where it's at now. Despite the dribble of big kev and the seemingly endless burden of the nanny-state we are still much more liberal than we were under prime ministers such as Fraser.

The added danger is that once embedded you may never be able to roll it back. Only the abrasive bullheaded strength of Margret Thatcher was capable of dragging the UK out of its socialist funk. And it took the gun-swinging cockiness of Ronnie Regan to halt the seemingly inevitable slide of the US into social democracy. People like this don't come along every day and it's not advisable to pin your hopes on one of them magically appearing at just the right moment to ensure that the bad 'isms are all swept away. France never got its Thatcher and subsequently is still unable to raise its head above the stink of its own socially democratic system.

Yes Australia was lucky enough that it got its silver headed little bodgy, but I think its fair to say that if he actually knew what he was doing he may not have done it.

Once entrenched, 'isms are very hard to get rid of (...if they can be gotten rid of). And the longer it takes us to get rid of the bad 'isms the more costs we will accumulate. In the case of environmentalism, those costs will be a suppressed economic growth (meaning incomes will be lower than otherwise) and ironically it probably means were not going to be able to deliver the strong environmental outcomes that liberal capitalist economies have to date.

One saving grace may be that unlike previous manifestations, environmentalism is associated with a set of objectives that are at lest in theory measurable. This gives its opponents ample ammunition to hold the ism to account. If you want to go and save lovely tree frogs, we should be able see just how effective you are by simply counting frogs. No matter how much you believe in global warming, unless the temperature actually goes up the thesis is doomed.

We need to deal with environmentalism. And one of the very first things we need to do is to stop treating it as the 'holy of holies' and subject it to some cold hard critical analysis, much as we do everything else. Environmentalists need to defend their arguments, justify their policy .... greens need to come clean and face the public in an open and transparent manner.

One way in which to do this is to examine the fundamental assumptions underlying their aruguments.


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